Principles of Federal Appropriations Law - U.S. Government

645 Pages·2011·3.4 MB·English

United States General Accounting Office
GAO Office of the General Counsel
Principles of
January 2004
Federal
Appropriations 
Law
Third Edition



Volume I

As of September 14, 2017, chapters 1, 2, and 3 of the Fourth Edition of
Principles of Federal Appropriations Law supersede chapters 1 through 4 of
the Third Edition of Principles of Federal Appropriations Law. Chapters 5
through 15 of the Third Edition of P rinciples of Federal Appropriations Law,
in conjunction with GAO,P rinciples of Federal Appropriations Law: Annual
Update to the Third Edition, remain the most currently available material on
the topics discussed therein. All current chapters and the Annual Update to
the Third Edition are available at www.gao.gov/legal/red-book/overview.
This volume supersedes the Volume I, Second Edition of the Principles of
Federal Appropriations Law, 1991.
The Security of this file is set to prevent a situation where linked references are
appended to the PDF. If this change prevents an Acrobat function you need (e.g., to
extract pages), use the the password “redbook” to revise the document security
and enable the additional functions.
a
GAO-04-261SP
Abbreviations
APA Administrative Procedure Act
BLM Bureau of Land Management
CDA Contract Disputes Act of 1978
CCC Commodity Credit Corporation
C.F.R. Code of Federal Regulations
EAJA Equal Access to Justice Act
EEOC Equal Employment Opportunity Commission
FAR Federal Acquisition Regulation
FY Fiscal Year
GAO Government Accountability Office
GSA General Services Administration
HUD Department of Housing and Urban Development
IRS Internal Revenue Service
NRC Nuclear Regulatory Commission
OMB Office of Management and Budget
SBA Small Business Administration
TFM Treasury Financial Manual
U.S.C. United States Code
URA Uniform Relocation Assistance and Real Property Acquisition
Policies Act
This is a work of the U.S. government and is not subject to copyright protection in the
United States. It may be reproduced and distributed in its entirety without further
permission from GAO. However, because this work may contain copyrighted images or
other material, permission from the copyright holder may be necessary if you wish to
reproduce this material separately.

Abbreviations
APA Administrative Procedure Act
BLM Bureau of Land Management
CDA Contract Disputes Act of 1978
CCC Commodity Credit Corporation
C.F.R. Code of Federal Regulations
EAJA Equal Access to Justice Act
EEOC Equal Employment Opportunity Commission
FAR Federal Acquisition Regulation
FY Fiscal Year
GAO Government Accountability Office
GSA General Services Administration
HUD Department of Housing and Urban Development
IRS Internal Revenue Service
NRC Nuclear Regulatory Commission
OMB Office of Management and Budget
SBA Small Business Administration
TFM Treasury Financial Manual
U.S.C. United States Code
URA Uniform Relocation Assistance and Real Property Acquisition
Policies Act
This is a work of the U.S. government and is not subject to copyright protection in the
United States. It may be reproduced and distributed in its entirety without further
permission from GAO. However, because this work may contain copyrighted images or
other material, permission from the copyright holder may be necessary if you wish to
reproduce this material separately.
Foreword

We are pleased to present the third edition of Volume I of Principles of
Federal Appropriations Law, commonly known as the “Red Book.” Our
objective in this publication is to present a basic reference work covering
those areas of law in which the Comptroller General renders decisions.
This volume and all other volumes of Principles are available on GAO’s
Web site (www.gao.gov) under “GAO Legal Products.”
Our approach in Principles is to lay a foundation with text discussion,
using specific legal authorities to illustrate the principles discussed, their
application, and exceptions. These authorities include GAO decisions and
opinions, judicial decisions, statutory provisions, and other relevant
sources. We would encourage users to start with at least a brief review of
Chapter 1, which provides a general framework and context for all that
follows. Chapter 1 includes a note regarding citations to GAO case law and
other relevant GAO material and an explanation of those other materials.
We have tried to be simultaneously basic and detailed—basic so that the
publication will be useful as a “teaching manual” and guide for the novice
or occasional user (lawyer and nonlawyer alike) and detailed so that it will
assist those who require a more in-depth understanding. The purpose of
Principles is to describe existing authorities; it should not be regarded as
an independent source of legal authority. The material in this publication is,
of course, subject to changes in statute or federal and Comptroller General
case law. Also, it is manifestly impossible to cover in this publication every
aspect and nuance of federal appropriations law. We have not attempted to
include all relevant decisions, and we admit (albeit grudgingly) that errors
and omissions probably are inevitable. Principles should therefore be used
as a general guide and starting point, not as a substitute for original legal
research.
It is also important to emphasize that we have focused our attention on
issues and principles of governmentwide application. In various instances,
agency-specific legislation may provide authority or restrictions somewhat
different from the general rule. While we have noted many of these
instances for purposes of illustration, a comprehensive cataloguing of such
legislation is beyond the scope of this publication. Thus, failure to note
agency-specific exceptions in a given context does not mean that they do
not exist.
As with the second edition of Principles, we are publishing the third
edition in a loose-leaf format. However, it will also be available
electronically at www.gao.gov. We plan four volumes with annual updates.

Page i GAO-04-261SP Appropriations Law—Vol. I
Foreword

Annual updates will only be published electronically. Users should retain
copies of their five volumes of the second edition until each volume is
revised. We will not update Volume III of the second edition, which was last
revised in November 1994. It deals with functions that were transferred to
the executive branch by the General Accounting Office Act of 1996 (Public
Law 104-316), including claims against the United States, debt collection,
and payment of judgments against the United States. Future editions and
updates of Principles will not include these subjects.
Volume V, published in April 2002, is a comprehensive index and table of
authorities covering the entire second edition of Principles. It will continue
to apply to the second edition volumes until they are revised. As each
volume of the third edition is issued, it will contain its own index. Once the
third edition is complete, we will publish a new comprehensive index and
table of authorities.
The response to Principles has been both gratifying and encouraging since
the first edition was published in 1982. We express our appreciation to the
many persons in all branches of the federal government, as well as
nonfederal readers, who have offered comments and suggestions. Our goal
now, as it was in 1982, is to present a document that will serve as a helpful
reference for a wide range of users. To that end, we again invite comments
and suggestions for improvement. We thank our readers for their support
and hope that this publication continues to serve their needs.
Anthony Gamboa
General Counsel
January 2004

Page ii GAO-04-261SP Appropriations Law—Vol. I
Detailed Table of Contents
Volume I
Chapters 1–5
Chapter 1

Chapter 1 A. Nature of Appropriations Law. . . . . . . . . . . . . . . . . . . . . . . . . 1-2
Introduction B. The Congressional “Power of the Purse”. . . . . . . . . . . . . . . 1-3
C. Historical Perspective. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1-14
1. Evolution of the Budget and Appropriations Process . . . . . . . .1-14
2. GAO’s Role in the Process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1-21
D. “Life Cycle” of an Appropriation . . . . . . . . . . . . . . . . . . . . . 1-24
1. Executive Budget Formulation and Transmittal . . . . . . . . . . . . .1-25
2. Congressional Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1-26
a. Summary of Congressional Process . . . . . . . . . . . . . . . . . . . . .1-26
b. Points of Order . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1-29
3. Budget Execution and Control . . . . . . . . . . . . . . . . . . . . . . . . . . . .1-31
a. In General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1-31
b. Impoundment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1-32
4. Audit and Review . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1-35
a. Basic Responsibilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1-35
b. GAO Recommendations and Matters for Consideration . . . . .1-36
5. Account Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1-37
E. The Role of the Accounting Officers: Legal Decisions . . 1-37
1. A Capsule History . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1-37
a. Accounting Officers Prior to 1894 . . . . . . . . . . . . . . . . . . . . . . .1-37
b. 1894–1921: Comptroller of the Treasury . . . . . . . . . . . . . . . . . .1-38
c. 1921 to the Present Time . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1-39
2. Decisions of the Comptroller General . . . . . . . . . . . . . . . . . . . . . .1-39
a. General Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1-39
b. Matters Not Considered . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1-42
c. Research Aids . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1-45
d. Note on Citations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1-45
3. Other Relevant Authorities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1-46
a. GAO Materials . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1-46
b. Non-GAO Materials . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1-48
c. Note on Title 31 Recodification . . . . . . . . . . . . . . . . . . . . . . . . .1-49
Chapter 2 A. Appropriations and Related Terminology . . . . . . . . . . . . . . 2-3
1. Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2-3
The Legal Framework
2. Concept and Types of Budget Authority . . . . . . . . . . . . . . . . . . . . .2-3
a. Appropriations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2-4
b. Contract Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2-6
c. Borrowing Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2-7
d. Monetary Credits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2-8
e. Offsetting Receipts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2-9

Page v GAO-04-261SP Appropriations Law—Vol. I
Contents

f. Loan and Loan Guarantee Authority . . . . . . . . . . . . . . . . . . . . .2-10
3. Some Related Concepts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2-12
a. Spending Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2-12
b. Entitlement Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2-13
4. Types of Appropriations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2-13
a. Classification Based on Duration . . . . . . . . . . . . . . . . . . . . . . . .2-13
b. Classification Based on Presence or Absence of Monetary 
Limit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2-14
c. Classification Based on Permanency . . . . . . . . . . . . . . . . . . . . .2-14
d. Classification Based on Availability for New Obligations . . .2-15
e. Reappropriation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2-15
B. Some Basic Concepts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2-15
1. What Constitutes an Appropriation . . . . . . . . . . . . . . . . . . . . . . . .2-15
2. Specific versus General Appropriations . . . . . . . . . . . . . . . . . . . .2-21
a. General Rule . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2-21
b. Two Appropriations Available for Same Purpose . . . . . . . . . .2-23
3. Transfer and Reprogramming . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2-24
a. Transfer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2-24
b. Reprogramming . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2-29
4. General Provisions: When Construed as Permanent Legislation 2-33
C. Relationship of Appropriations to Other Types of
Legislation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2-40
1. Distinction between Authorization and Appropriation . . . . . . . .2-40
2. Specific Problem Areas and the Resolution of Conflicts . . . . . . .2-42
a. Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2-42
b. Variations in Amount . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2-46
(1) Appropriation exceeds authorization . . . . . . . . . . . . . . . . 2-46
(2) Appropriation less than authorization . . . . . . . . . . . . . . . 2-47
(3) Earmarks in authorization act . . . . . . . . . . . . . . . . . . . . . . 2-50
c. Variations in Purpose . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2-51
d. Period of Availability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2-52
e. Authorization Enacted After Appropriation . . . . . . . . . . . . . . .2-56
f. Two Statutes Enacted on Same Day . . . . . . . . . . . . . . . . . . . . .2-59
g. Ratification by Appropriation . . . . . . . . . . . . . . . . . . . . . . . . . . .2-61
h. Repeal by Implication . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2-66
i. Lack of Authorization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2-69
D. Statutory Interpretation: Determining Congressional 
Intent. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2-71
1. The Goal of Statutory Construction . . . . . . . . . . . . . . . . . . . . . . . .2-72
2. The “Plain Meaning” Rule . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2-74
a. In General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2-74
b. The Plain Meaning Rule versus Legislative History . . . . . . . . .2-76

Page vi GAO-04-261SP Appropriations Law—Vol. I
Contents

3. The Limits of Literalism: Errors in Statutes and “Absurd
Consequences” . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2-78
a. Errors in Statutes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2-78
(1) Drafting errors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2-78
(2) Error in amount appropriated . . . . . . . . . . . . . . . . . . . . . . 2-80
b. Avoiding “Absurd Consequences” . . . . . . . . . . . . . . . . . . . . . . .2-80
4. Statutory Aids to Construction . . . . . . . . . . . . . . . . . . . . . . . . . . . .2-83
a. Definitions, Effective Dates, and Severability Clauses . . . . . .2-83
b. The Dictionary Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2-83
c. Effect of Codification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2-84
5. Canons of Statutory Construction . . . . . . . . . . . . . . . . . . . . . . . . .2-85
a. Construe the Statute as a Whole . . . . . . . . . . . . . . . . . . . . . . . .2-85
b. Give Effect to All the Language: No “Surplusage” . . . . . . . . . .2-87
c. Apply the Common Meaning of Words . . . . . . . . . . . . . . . . . . .2-89
d. Give a Common Construction to the Same or Similar Words 2-89
e. Punctuation, Grammar, Titles, and Preambles Are Relevant but
Not Controlling . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2-92
f. Avoid Constructions That Pose Constitutional Problems . . .2-94
6. Legislative History . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2-96
a. Uses and Limitations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2-96
b. Components and Their Relative Weight . . . . . . . . . . . . . . . . . .2-98
(1) Committee reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2-98
(2) Floor debates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2-100
(3) Hearings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2-102
c. Post-enactment Statements . . . . . . . . . . . . . . . . . . . . . . . . . . .2-103
d. Development of the Statutory Language . . . . . . . . . . . . . . . . .2-105
7. Presumptions and “Clear Statement” Rules . . . . . . . . . . . . . . . .2-106
a. Presumption in Favor of Judicial Review . . . . . . . . . . . . . . . .2-106
b. Presumption against Retroactivity . . . . . . . . . . . . . . . . . . . . . .2-108
c. Federalism Presumptions . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2-111
d. Presumption against Waiver of Sovereign Immunity . . . . . .2-113
Chapter 3 A. Agency Regulations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3-2
1. The Administrative Procedure Act . . . . . . . . . . . . . . . . . . . . . . . . . .3-3
Agency Regulations
a. The Informal Rulemaking Process . . . . . . . . . . . . . . . . . . . . . . . .3-4
and Administrative
b. Informal Rulemaking: When Required . . . . . . . . . . . . . . . . . . . .3-9
Discretion c. Additional Requirements for Rulemaking . . . . . . . . . . . . . . . . .3-13
2. Regulations May Not Exceed Statutory Authority . . . . . . . . . . . .3-16
3. “Force and Effect of Law” . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3-18
4. Waiver of Regulations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3-20
5. Amendment of Regulations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3-24

Page vii GAO-04-261SP Appropriations Law—Vol. I